Marathon Receives Norwegian Government Approval for Volund Field Plan for Development and Operation Offshore Norway

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Thursday, January 18, 2007

Marathon Oil Corporation (NYSE: MRO), through its wholly owned subsidiary Marathon Petroleum Norge AS, and its Volund project partner, have received approval from the Norwegian Ministry of Petroleum and Energy for the companies' plan for development and operation (PDO) of the Volund field located on the Norwegian Continental Shelf. The Volund development is expected to begin production in the second quarter 2009. Marathon holds a 65 percent interest in Volund and serves as operator while Lundin Norway AS holds the remaining 35 percent interest.

Volund is located approximately seven miles south of the Marathon operated Alvheim development in Production License 150. The field will be developed as a subsea tie-back to the Alvheim floating production, storage and offloading (FPSO) vessel. The Volund development, which will include three producing wells and a water injection well, is estimated to contain gross risked resources of approximately 40-50 million barrels of oil equivalent. Volund crude oil will be incorporated into the Alvheim blend and exported via shuttle tankers. Associated gas will be exported via the Alvheim-to-SAGE pipeline.

"Volund is a good example of our ability to identify innovative ways to commercialize smaller fields through existing infrastructure," said Steven B. Hinchman, Marathon senior vice president of Worldwide Production. "We are pleased that the Norwegian Ministry of Petroleum and Energy has approved the approach we will be taking to ensure efficient utilization of the Alvheim FPSO and the full realization of the resource potential of Volund."

Volund will join the Vilje field as the second third-party field to be developed as a subsea tieback to Alvheim. The Hydro operated Vilje field is located approximately 11 miles northeast of Alvheim. Marathon holds a 46.9 percent interest in Vilje. The combined Alvheim/Vilje development is estimated to contain resources of approximately 200-250 million gross risked barrels of oil equivalent.

First production from Alvheim is expected during the first quarter of this year. Marathon's Alvheim development partners are ConocoPhillips Norge AS with a 20 percent working interest, and Lundin Norway AS, which holds the remaining 15 percent interest. The Alvheim field encompasses Production Licenses PL 203, PL 088BS and PL 036C on the Norwegian Continental Shelf.


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